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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Lock In Rate
Sir i understand that the lock in rate in used in forex risk in futures and in interst risk options and futures both, and basically its used to estinate spot rates , is there any other use? Like estimation of futures price too, because calculation is very similar to basis risk
and sir is the calculation virtually same? basis risk to estimate rate and lock in rate
The lock-in rate is certainly not used to estimate the spot rates!
It is used to calculate the net effect of using the spot rates together with the gain or loss on the futures.
The calculation of it is based on the basis risk – not just similar!
I do suggest that you watch my free lectures on this.